What are the rules on getting a loan in Spain as a foreigner?
Getting a bank loan in Spain as a foreigner is possible, but there are several factors to consider that might make your application more (or less) likely to be accepted.
If you're a foreigner in Spain, in theory getting a bank loan should be no different to in your home country with many of the same requirements (more on that below).
However, depending on several factors, the terms of the loan could be slightly worse than those offered to residents.
This is because some banks might see you as a greater risk and know they cannot easily get the money back from you if you don’t pay up and flee the country.
Here are the factors you need to consider when going for a bank loan in Spain as a foreigner.
READ ALSO: The best high-yield savings accounts in Spain
Be established in Spain
The longer you've lived in Spain, the better. A bank is far more likely to give you a loan after five or ten years in the country, living and working there, paying taxes (and banking there), than if you arrive on a Monday and on the Tuesday morning you're in your local Caixa or Santander branch asking for a big loan.
For a bank to trust you with a loan, it's helpful if you've been living in Spain for several years. Why? For a financial institution or bank it is much safer to lend money to a person who has lived and worked here for a long time. There is less risk that you flee the country and never pay it back if you are established in Spain.
Therefore, if you have permanent residency, your chances of getting a loan will probably be higher.
But there will also be loan options for you if you are from an EU country, Switzerland or the European Economic Area, or if you have a temporary residence permit and work as an employee or self-employed person in Spain.
It is possible to get a bank loan in Spain if you're a non-resident, but the conditions would likely be a bit tougher, whether it by higher interest rates or shorter repayment terms.
READ ALSO: How to open a bank account in Spain if you're not a resident
Employment stability
Not only does your life have to be relatively settled in Spain, but you'll need to demonstrate to the bank that your finances are too.
Having a stable income and job is also essential because banks can ensure that you will meet the agreed payment instalments and deadlines. A salaried person with a permanent contract is much more likely to get a loan than one with a temporary contract, for example.
If you are self-employed, many Spanish banks will ask that the business has running at a profit for at least some time to ensure a stable employment situation.
Income
That said, your job, however stable, must pay enough. Many Spanish banks will want to see evidence you have the income to pay off your loan.
Generally speaking, banks won't want to lend you significant sums of money if the repayments are equivalent to 35 percent of your monthly income.
Credit history
Like in any country, before granting the loan, Spanish banks will check your credit history for outstanding debts and try to get a better picture of your overall financial situation both in Spain and abroad.
If you have been up to date with your credit and debt payments, and have never defaulted on a loan or payment, you are more likely to be granted a loan.
What about mortgages?
Getting a mortgage in Spain as a foreigner can be a little trickier too. This is especially true if you're a non-resident, something that is often the case for foreigners wanting to buy property in and move to Spain.
Banks in your home country may be unwilling to lend you money to buy a property abroad and it may be difficult to organise one in a country where you don’t live or speak the language.
The good news is, however, that it is possible to contract a mortgage with a Spanish bank, even if you’re a non-resident, although the conditions will be slightly different from those for locals or residents.
Fortunately, The Local Spain has covered what you need to know about getting a mortgage in Spain as a foreigner in depth. You can read below:
READ ALSO:
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If you're a foreigner in Spain, in theory getting a bank loan should be no different to in your home country with many of the same requirements (more on that below).
However, depending on several factors, the terms of the loan could be slightly worse than those offered to residents.
This is because some banks might see you as a greater risk and know they cannot easily get the money back from you if you don’t pay up and flee the country.
Here are the factors you need to consider when going for a bank loan in Spain as a foreigner.
READ ALSO: The best high-yield savings accounts in Spain
Be established in Spain
The longer you've lived in Spain, the better. A bank is far more likely to give you a loan after five or ten years in the country, living and working there, paying taxes (and banking there), than if you arrive on a Monday and on the Tuesday morning you're in your local Caixa or Santander branch asking for a big loan.
For a bank to trust you with a loan, it's helpful if you've been living in Spain for several years. Why? For a financial institution or bank it is much safer to lend money to a person who has lived and worked here for a long time. There is less risk that you flee the country and never pay it back if you are established in Spain.
Therefore, if you have permanent residency, your chances of getting a loan will probably be higher.
But there will also be loan options for you if you are from an EU country, Switzerland or the European Economic Area, or if you have a temporary residence permit and work as an employee or self-employed person in Spain.
It is possible to get a bank loan in Spain if you're a non-resident, but the conditions would likely be a bit tougher, whether it by higher interest rates or shorter repayment terms.
READ ALSO: How to open a bank account in Spain if you're not a resident
Employment stability
Not only does your life have to be relatively settled in Spain, but you'll need to demonstrate to the bank that your finances are too.
Having a stable income and job is also essential because banks can ensure that you will meet the agreed payment instalments and deadlines. A salaried person with a permanent contract is much more likely to get a loan than one with a temporary contract, for example.
If you are self-employed, many Spanish banks will ask that the business has running at a profit for at least some time to ensure a stable employment situation.
Income
That said, your job, however stable, must pay enough. Many Spanish banks will want to see evidence you have the income to pay off your loan.
Generally speaking, banks won't want to lend you significant sums of money if the repayments are equivalent to 35 percent of your monthly income.
Credit history
Like in any country, before granting the loan, Spanish banks will check your credit history for outstanding debts and try to get a better picture of your overall financial situation both in Spain and abroad.
If you have been up to date with your credit and debt payments, and have never defaulted on a loan or payment, you are more likely to be granted a loan.
What about mortgages?
Getting a mortgage in Spain as a foreigner can be a little trickier too. This is especially true if you're a non-resident, something that is often the case for foreigners wanting to buy property in and move to Spain.
Banks in your home country may be unwilling to lend you money to buy a property abroad and it may be difficult to organise one in a country where you don’t live or speak the language.
The good news is, however, that it is possible to contract a mortgage with a Spanish bank, even if you’re a non-resident, although the conditions will be slightly different from those for locals or residents.
Fortunately, The Local Spain has covered what you need to know about getting a mortgage in Spain as a foreigner in depth. You can read below:
READ ALSO:
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